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Topical Tips
117
June
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In Topical Tips 107 we advised on the new rates an
employee can claim for business mileage when they pay for all the fuel on a
company car. That was from 1 Januray 2008, but now the rates have changed
again!
With effect from 1 July 2008 H M Revenue &
Customs (HMRC) has increased the amounts that can be claimed tax-free. The
revised rates are as follows:
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In an interesting move, HMRC has announced that
given the very rapid rise in fuel prices, they are happy to allow employers to
use the new, increased rates from 1 June 2008 where they are able to do so.
And remember, in order for you to claim back the VAT element your staff
should follow the guidance in
Topical Tips 77. |
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Concerns have been raised with HMRC regarding the
consequent administrative difficulties if the tax-free rates are subject to
frequent changes as a result of petrol price fluctuations. HMRC has confirmed
that the rates will be reviewed for 1 January and 1 July each year and in the
event of a variation of fuel prices of greater than 5% when HMRC considers the
change to be sustained. |
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If you have a specific vehicle that
substantially differs from the above, then it is possible to ask your local
PAYE office for their agreement to using a different rate for that vehicle.
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You must keep detailed records of
amounts claimed (date, mileage, engine size, rates used, reason for the
journey) to satisfy any HMRC visit.
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This treatment is extended to
employers with dispensations for fuel rates that are linked to the advisory
fuel rates. Where a dispensation is in place this will need to be
reviewed/adjusted.
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This does not alter the 40p/25p
rate payable when staff use their own cars for company
business.
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Consult your Barnes Roffe LLP
contact Partner for guidance in this important area.
Topical Tips is designed to be a
simple and useful source of ideas and information for clients and contacts of
Barnes Roffe LLP. If you are unsure about the implications of any idea
contained therein please contact your Barnes Roffe LLP partner. Barnes
Roffe LLP cannot take responsibility if the ideas are implemented without its
involvement. |
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